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Penticton bucks spending trend

With municipal elections approaching in November, B.C. business groups are renewing their pressure on political contenders to slow the rapid growth of local government spending.

The Canadian Federation of Independent Business asked mayors and councillors attending the Union of B.C. Municipalities convention to sign a “taxpayer pledge” that calls on them to hold operating expense growth down to the combined increase in population and inflation, and narrow the gap between property tax rates for business and residential properties.

The CFIB calculates that B.C.’s municipal operating spending rose nearly 58 per cent between 2000 and 2008, twice as fast as population and inflation grew.

But there’s one exception: Penticton. The South Okanagan city cut its spending by 0.5 per cent last year after a core services review, which trimmed staff budgets by 10 per cent. The cutbacks garnered regional attention last week, with Mayor Dan Ashton and city administrative officer Annette Antoniak receiving media attention for their work to reduce spending.

“We’re the only municipality in British Columbia to have a negative tax increase,” Ashton said. “We’re well ahead of the curve. That’s why we did our core services review, and this council has been committed to making it as minimal, if not nothing, as possible.”

Asked if he had signed the pledge on Wednesday, Ashton was quick in dismissing the idea.

“I have a lot of respect for organizations on both sides of the fence, but we’re doing things based on what’s good for Penticton. In my opinion, that should be a council decision and go on from there,” he said.

“I’m a very well-known fiscal conservative myself. So I don’t need to sign a pledge to ensure that I’m doing the best job to make sure the minimal tax impact is passed along to the citizens.”

There were several civic officials, however, that did sign on to the document Wednesday.

Shachi Kurl, the B.C. director of the CFIB, said the initial response is good, considering her group was told not a single incumbent would publicly support the pledge. She’s hoping candidates for municipal office will carry the taxpayer pledge message into their campaigns.

The UBCM executive issued its own analysis this spring, rebutting several years of CFIB claims that municipal spending is out of control. The UBCM analysis points to rising police, firefighting and recreation costs, as well as those imposed by senior governments such as paying for carbon offsets.

Colwood Mayor Dave Saunders is one who signed the pledge, although he isn’t seeking re-election. He said the tax targets are similar to what his council has accomplished by this year, and he would have signed the pledge if he was running in November.

Unionized municipal workers have to look at the state of the economy and see if their wage demands are holding back the growth of their community’s business tax base, Saunders said in an interview.

“The private sector can’t expect a cost of living pay increase every year, so I don’t think it’s fair in relation to union or private to say one’s going to get it but not the other,” he said.

Joining the CFIB in this year’s push for spending restraint is the Independent Contractors and Business Association. The ICBA produced a report detailing a similarly steep rise in municipal fees for construction, linking it to union contracts that feature pay and perks well beyond the private sector average of recent years.

ICBA president Phil Hochstein said “gold-plated” union contracts with wage increases beyond inflation and benefits such as cash payouts for unused sick days are a key driver of costs.

“Unions are not to blame,” Hochstein said. “It is municipal politicians who have forgotten how to say no to everything but tax increases.”

With files from Tom Fletcher

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